Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs about how they built their businesses. Oh man, I’m shot out of a freaking cannon today. I’ve got way too much energy. I’ve got to calm down.
Nathan: That’s great, dude. The freedom fighters love it.
Andrew: Joining me is a long-time Mixergy listener who built and sold a company. And the reason I’m shot out of a cannon, and he recently wrote a book. And when I get a book from a guest and for some reason some guests don’t even freaking send me the books. When I get a book, I can’t help but sit and read it, and usually I will speed read it in under an hour and you quiz me, I get all the data from the book. I know it. I remember.
This book I just spent two hours reading downstairs. I couldn’t put it down. I kept texting Nathan saying, “I need a little bit more time.” The book is called “How to be a Capitalist without Capital.” It talks about all the different businesses that he started. I couldn’t put it down because of the hustler ideas in there that are the types of things that Nathan and I would talk about when we’re out having coffee, but I didn’t think he would talk about in his book because it feels a little bit déclassé to say things like, “Here’s how I got a jacket to wear for a date on Instagram. Here’s how I took my shirt off.” And especially since, Nathan, you’re like cultivating this brand, this reputation as an entrepreneur who’s built a company and sold it, invested in companies.
Nathan: Andrew, but abs still sell. That’s the problem. You can be a private equity guy paying me a lot of money, you still like a good ab shot. It’s a weird mix these days. People . . .
Andrew: I hate to say it, I was very impressed that you had abs. For some reason that adds a lot of credibility. It’s like, “All right, the guy just put in the work.” All right. Nathan Latka you guys know as a founder of a company called Heyo which did Facebook page creation among other things. He sold it I thought at great deal and turned out it wasn’t that great.
He then went on to start a podcast, and from the podcast or through the podcast, he started generating ad sales and then he started buying software companies and growing them. And he took all the data from his business podcast and he created this database site called GetLatka. So there’s a lot I could interview him about. Here’s what I’m going to focus this interview on. How did he take his podcast and then turn it into an online database called GetLatka which businesses, I guess, are paying for access to? So I want to understand both of those two things, the podcast and then the revenue that comes from it and then how he turned it into a database that businesses are paying to get access to.
All right. This interview is sponsored by two phenomenal companies. The first, Nathan uses himself, it’s called ActiveCampaign, great for email marketing. And the second will help you if you’re looking to get more attention for your business, it’s called JustReachOut. I’ll tell you guys about those later.
Nathan, good to see you here.
Nathan: Yeah, Andrew. It’s still a shocking to me. Last night I’m texting you going, “Hey, I wrote a book. You want to do a thing?” and you’re like, “Yay, I have a spot tomorrow.” And I’m like, “Well, do you have time to read the book?” and you’re like, “Shoot it over.” I’m like, “Well, my publisher is going to hate me, but here’s the PDF,” and sure enough this morning you’re texting me. Your speed reading is incredible.
Andrew: Yeah. I listened to heavy metal, like the biggest, loudest punk music I can and then I speed just like they speed through their music. Hey, why don’t we talk about Heyo real quick before we get into your podcast?
Andrew: You talked about the big offer that you had for Heyo, which was? How much money?
Nathan: This is actually a beautiful thing. I’ll show it to you. That’s easy, right? So you know Ryan Allis. Actually, I heard his interview on Mixergy, that was one of the reasons I knew when I sent this email to try and sell Heyo, I knew to reach out to Ryan because he was kind of in the same space. But no, this is what it was. This is October 20th, 2011. To me, this is the full kind of LOI from Ryan and I contact and you can see there the highlighted mark there, $6.5 million was essentially the acquisition offer. And this was in 2011. And this sounds very rosy but, Andrew, you know kind of what happens afterwards which I’m sure we’ll get into.
Andrew: The reason . . . Well, that’s not what you sold the company for. Why did you say no to that? What were you thinking?
Nathan: Total ego. I mean, that was around the same time that Zuckerberg was looking and turning down offers from Microsoft and Yahoo for billions of dollars and I’m going, “Yak.”
Andrew: Wait. No, no. He did that before. And you’re saying, in the background of your . . .
Nathan: In my head. Yeah, yeah.
Andrew: In your head you you’re thinking, “Mark Zuckerberg turned down a billion dollars from Yahoo. Why would I take 6 point something dollars . . .
Andrew: . . . million dollars.
Nathan: And by the way, like, what this start about is now I have my own fund and I’m trying to buy companies and when a CEO looks at me he goes, “Nathan, I’m doing $10,000 a month in revenue. I want $1 billion like Mark Zuckerberg.” I go like, “F off. Come back when you’re more rational.” So, look, you have to learn somehow. This was a $6 million learning experience for me, so now we walked away from the offer, didn’t sell for 6.5.
Andrew: And how much money had you raised for it?
Nathan: We raised a total of $2.5 million, 500K kind of angel round from people that you know well. I think you know well, people like 500 Startups crew, David Cohen who created Techstars. And then after that we raised 2 million from a Forbes billionaire who was based in Radford or Blacksburg which was Virginia Tech, my college town.
Andrew: And so they wouldn’t have let you take that and they wouldn’t have wanted such a low return, right? They would have wanted you to keep going?
Nathan: No. Well, so let me break this down because I think no one talks about us enough and I always push people, SaaS CEOs, and my thing to tell these stories and they never do. So I have to now tell you. You’re getting at the most vulnerable spot, which is no one talks about how to shut a company down, right? And so what happened was that $500,000 you raised from angels, their class of stock sat below the 2 million we raised later from this particular Forbes billionaire, and his name is RJ Kirk.
And so what happened was, “Hey, what’s going on?” In 2011, we were doing fine. We were doing these board decks. Actually, I have a . . . I mean, I actually put the board deck in here. You guys can see it on page 35 right there, Andrew, you saw too, but this is the board deck and what happened was the company was basically growing really fast up to $100,000 a month in revenue and then it like, basically flat-lined right around the time that your friends at Wildfire and Involver and Vitrue and Buddy Media, everyone else in the social media space in 2011, 2012 sold for lots of money and we didn’t.
This was the same time we got this offer, we didn’t. And so we basically flat-lined after that and started basically slowly decreasing year-over-year revenue basically 5 to 10% per month. And what happened was, Andrew, I was super comfortable. I mean, I was getting a paycheck because I was the CEO, I set my own pay of like $100,000 a month. I think that’s in the book somewhere in the screenshot.
Andrew: Wait. Not $100,000 a month.
Nathan: I’m sorry. Sorry.
Andrew: Come again. A year or . . .
Nathan: A year. Yeah, a year. Thank you. And the reason that this is so important is because I remember in that moment I was so comfortable in that board meeting, I was ready to wage war because I knew the series A investors that put in 2 million were going to ask me to shut the company down and return money. We had $1 million in the bank still, so they were looking at it going, “Okay. It won’t be a total write off. We’ll get $1 million back, 50 cents on the dollar.”
In my head I’m going, “I want to keep doing this for 10 years. It’s great salary. We have cash in the bank. I can milk this revenue stream for a long time.” And so ultimately, what I realized I was pissed after that board meeting. But one of my very good friends named Pat Matthews and now owns Active Capital, he always gives this to me really and said, “Nathan, your opportunity cost is too high when you’re this young. You’re 25. You’re single. No kids. You need to free up your time and go do something else that you can drive a lot of growth.” And he said, “You should do media.”
And so that will get into the podcast story, but ultimately, Andrew, we only sold the company in the end for about $300,000 which added to the million-ish we had in the bank. So basically we had 1.4 million cash in the bank which we returned to all of our investors at the end. We raised $2.5 million, you can do the math there in terms of dollars or cents we gave back on the dollar.
Andrew: But I’m saying when you got the $6 plus million offer from Ryan Allis, your investors would have told you, “Don’t do it. Aim for the billion-dollar exit too.” Right?
Nathan: Yeah, totally. Yeah, of course. Of course.
Andrew: And then at some point, the business turn because Facebook wasn’t supporting these Facebook pages that you helped create. Am I right about that?
Nathan: To an extent. Look, I’m not perfect in my kind of post analysis here, but I would credit actually more of our flat-lining to we missed the timing. Consolidation happened. All these other companies exited. We didn’t in that time frame. And so I get this with entrepreneurs all the time looking to sell, like, you have to understand 90% of your wealth in life is going to be luck. And when you set yourself up to be lucky, when you have LOI for $6.5 million, you should sell too early. That’s how you get rich and go do that.
Andrew: How did you . . . So you had got a lot of bravado after that sale. Knowing that you’d sold too late, how did you pull off that bravado?
Nathan: Well, I mean, first off, you can see an example of this in my last interview with you. I think the title is, “Is Nathan Latka a Bullshit Artist?” which was like the great title. It’s one of the first thing they’ll see when they search Nathan Latka. And I get so many people reaching and going, “Nathan . . . ” They meet me in person they go, “Nathan, I thought you’re like this mean guy and you’re just actually big teddy bear in person which . . . ” So I love it, right? The expectations are set low.
But no, you’re right. I mean, I had to do, and I think I did a brilliant job by the way of like, spin, spin, spin, spin, trying to take the positive out of this thing that I could get my first guest on the podcast, right? And I thought I had to do that to make that happen. In truth, I bet you, I didn’t have the courage to do it then, but I bet you if I was just direct and honest and boom and said, “Here’s what happened,” I still would have had the same kind of thing but no, I spun, spun, spun.
Andrew: And did you feel like a liar internally at the time? Did you feel like a fraud for doing that?
Nathan: I was always really careful not to give out specific numbers, right? So I never would say like, “We sold for $40 million,” or something like that. What I would say is like, “We sold for a price that everyone really liked,” which is true. I mean, this is like pushing that edge, right? Like, our investors at that board meeting wanted us to shut down. They were really happy when they finally convinced me to return $1.5 million because they thought they were going to basically be a full write-off.
Andrew: You want to know what else was effective with you?
Andrew: I called people to get info about you and they gave me info. And I do this all the time. What was interesting was they were very scared of you at the time. The fact that you’d gone after a couple of people, just showed some teeth, made everybody scared to even talk to me off the record, which I’ve never revealed anything off the record and still I thought that was very effective. It’s shitty for me because I need to know that kind of data, but it was very effective, and I’ve got to acknowledge that in this interview.
Nathan: You have to hit . . . First off, Andrew, you . . . I’m like a wartime CEO. You have to defend yourself. Like if someone comes after you, you have to hit them back hard and hit them back hard publicly because it’s a message to everyone else in the future who might think about coming after you, and they’re going to go, “You know what? I probably should think twice because Nathan’s going to come at me really hard.” By the way, you’re seeing this right now with the president. By the way, I don’t like the president in a lot of ways, but the psychology of managing your enemies is pretty impressive.
Andrew: And I’ve to got to say, it’s not that you are going to be able to ruin a lot of other people.
Andrew: It’s just like, who wants to get distracted by this and get into whatever social media firestorm is going to happen.
Nathan: Like Stelzner, by the way. Like Michael Stelzner. I don’t know . . . I mean, you remember this. I don’t know if you were involved with that, but, by the way, he reached out just recently and said, “Nathan, I’d love to have you on my pod . . . ” I mean, this is what happened, by the way, with people that you hit back at hard and they actually respect you many times. And you know Michael well. I mean, he’s not a guy that likes conflict.
Andrew: He doesn’t.
Nathan: But him and I were on the phone just last week and he is excited to have me on his podcast. He’s going to have me on, and it’s going to be a ton of fun. So there is . . . people . . . I’m a fighter, and so I love fighting back and I actually enjoy . . . I love conflict. So these things were natural for me.
Andrew: He is the founder, of course, of Social Media Examiner, Michael Stelzner, who did not like fighting with you. Okay. So you still went out there. I thought for a while there you were trying to figure out, “What am I going to do next?” And for a while there you were reading a book a day or something and publishing your notes on that. It was you trying to develop a media brand. It wasn’t until you got into podcasting that things were starting to work for you. Am I right?
Nathan: It depends on how you define work. I didn’t spend a lot when I was building Heyo, so I saved a lot of my money. I mean, I had a lot . . . I mean, relatively speaking as at 22, 23, 24. You know what I mean? I had a lot in savings. And so . . .
Andrew: How much are we talking about?
Nathan: Yeah. I knew you were going to ask that and I don’t want to give any . . .
Andrew: I just want to get a ballpark. I don’t need the exact number.
Nathan: Yeah. Well, look, I think what’s . . .
Andrew: Tens of thousands?
Nathan: Oh, no, over 100,000.
Andrew: Oh, over 100. Okay. That gives me a sense of it. And the reason is, again, I was reading your book and there are things in there that we couldn’t fully cover in here, but one thing I think that’s helpful to talk about is you got into real estate kind of early, right?
Andrew: Why don’t we talk about that because that contributed to this $100,000 plus bank account? And it started with you looking for a place to live when you were in college.
Andrew: And how did you come across this place?
Nathan: So that was the bluff. What happened was like, I had already basically dropped out, but I knew the only way I could do a deal was to find the owner of a property. So I shaved this beautiful beard off to look younger, put a Virginia Tech shirt on and went door knocking and saying, “Hey, do you have any vacancies? I need a place to rent.”
Andrew: Oh, this is even after you dropped out of college?
Nathan: Yeah. Well, it was right around the same time.
Andrew: Got it.
Nathan: I can’t remember if I had dropped out. Regardless I was living like I already had a place in downtown Blacksburg [above 00:13:23] loft. I still went door knocking and this was . . . It’s kind of like a cold email. You got to have a subject line that gets the attention of the person you want. So I would knock and if they said, “We don’t have any room to have you lease from us because we’re full,” I would say, “Great. Can you introduce me to the owner of the property so when you guys move out in a year or two I could contact them?” And then if they said, “Yes, I do have a space,” I said, “Great. Can you introduce me to the owner so I can sign a lease?” So either way I got what I wanted was to the owner, and then the story continued from there, once you get the owner, you take him to coffee, understand their background and then that’s how I did that first deal.
Andrew: Yeah. I was trying to understand why you went to coffee with the owner. What were you trying to do? Understand real estate or what?
Nathan: One question. Understand and make him feel if he had the money from the sale, where would he spend it? And I wanted him to talk about it so that he felt like he already had that thing because humans hate losing things. So if you make someone feel like they already have something based off cash you gave them, they’re more likely to take your cash, i.e., he is more likely to sell his property to me.
Andrew: And that’s what you wanted. You wanted to be able to buy property, and you talked about in the book, I think it was like $400,000, somewhere around there.
Nathan: The first one was $328,000. It was in [Otey 00:14:32] Street in Blacksburg, Virginia. And I did another one on Roanoke Street which they’re very close, I would say maybe a year or two apart, but I followed the same strategy on both.
Andrew: So the first one, you go in, you buy the place, you said you didn’t even put . . . I think you said you put down 3%, am I right?
Nathan: Yeah, because basically you can go live in the place and put basically less than even 5% or 3% down.
Andrew: And then you got roommates and they rented from you.
Andrew: Okay. And then the second one I think was the one that was a failure you said where the cash flow was negative?
Nathan: Yeah, the second one . . . So the negative cash flow, this is actually mistake on my part. When I bought it, it had like utilities and kind of expenses that I thought the renters were paying when actually the owners were paying. So it turns out, and again, I’m going on top of my head now because I don’t have all the numbers memorized from the book. But that property, it was something like I was spending like $1,900 or $2,100 a month on expenses and rent was only 1600 or something, but when the renewals came up, we flipped it, I increased the rent a bunch and I pushed the expenses back on them and now that property cash flow was about $600 to $700 a month.
Andrew: Okay. And this is part of what contributed to your big savings. The other part was you were saving money from work, from Heyo.
Nathan: That’s right. Yep.
Andrew: Was there anything else that you were doing at the time?
Nathan: No, no. Heyo was the big one, income from Heyo.
Nathan: And by the way, people never talk about this, Andrew, because it’s less sexy. Decreasing expenses. Like, I lived at the nicest apartment in downtown Blacksburg above the theater, and what I did is I rented out a portion of it even though technically it wasn’t legal because I was renting through a property management company, but I rented to a friend and I charged her more for the little corner of the thing . . . more than what my total rent was. So I was living like a king without having to pay for it. Like, it’s actually, I find way more value in how to keep expenses low because it’s more of a puzzle to crack. Then you obviously increase your, I call it life margin, and that’s how you save a lot of money.
Andrew: Yeah, I kind of like . . . This is the weird stuff that made me spend more time with your book and like your book more. It wasn’t like a single flow here’s step 1, 2, 3 to 10 of doing this one thing, it was the mind of Nathan Latka expressed through lots of different things from real estate to software to media to even t-shirts for example. So when you said, “I try not to spend a lot of money,” it made me think about the section of the book where you talked about your Banana Republic strategy.
Andrew: Talk about that. And again, this is what keeps me from getting lost in a flow of the book but also what excites me because for some reason I just love this type of, “Where do I save money?” thinking and “Where do I make another dollar?” The combination is why I always used to love going to dinner with Neil Patel. He and his friends would constantly do this. They would be millionaires and still talk about how they save money by telling the guy at the at AT&T store to please throw in a case.
Andrew: You know. So just talk about the Banana Republic strategy, and I promise guys, we’re going to talk about how much he’s making with the podcast and then GetLatka, I was surprised is bringing in a considerable amount of money every month. I want to know how that built from the podcast. But Banana Republic.
Nathan: Yeah. This is the t-shirt. Every day . . . I mean, I think you can even see the logo there, right? Banana Republic. This is a shirt that basically they retail, they sell it for I think 25, maybe $30. They usually would always be running at 25 to 50% discount on it so that takes it down to like 15 or 20, but they have a little box next to the register where if you bring back all your old Banana Republic shirts and you turn them in, they donate them, they give you another 15% off. So I would then by these in bulk, 10, 20 chunks at like $12, $13 a pop, and you wear these every day. The reason they’re great, like, a few things. They have the travel well because I’m always on the road and it has to be a carryon, so they have to be tight. Like, I don’t have a big thing, right? And they have to be wash really easily and they have to feel really good. And they work with anything. They work in cold, hot weather, they work all over the place, or even in the gym. So like, this is the shirt that I go to. And by the way, they stopped selling these shirts but thankfully I have a massive inventory in my closet.
Andrew: I think it also helps that you’re not in a long-term relationship with someone because I think if you’re with someone who saw you day after day in the same shirt, they would want to smack you. But there’s another thing that helps which is, you dress it up from time to time, right? It seems like that’s part of it, so it’s t-shirt every day except on days when you go to 100.
Nathan: That’s right. Yeah. Yeah, yeah. Some days I’ll splurge when I went to the Oscars and spent $20,000 on a stylist and custom Tom Ford suit and all this kind of stuff, but that’s . . .
Andrew: And why do you do that?
Nathan: Well, because the alternative is I make my whole life that way and I end up like a Tai Lopez where you make no money because . . .
Andrew: And why don’t you do none of your life that way?
Nathan: Well, because it’s a taste that I want something of. It’s kind of like why . . . Entrepreneurs are curious. You’re an interviewer because you’re curious, you ask questions. That’s like an experience that I want to understand. What does a celebrity think like when they’re walking down the red carpet?
Andrew: Because you want to be that.
Nathan: Well, no. I want to understand those people. I want the empathy. That’s the trick.
Nathan: Well, because if you have more empathy, you ask better questions and you accelerate your learning curve. And by the way . . .
Andrew: From them? So you don’t want to be them, you want to be more like them, the way to understand what to ask them, to be more like them is to be surrounded by them from time to time.
Nathan: Yeah. For example, by going to this Oscar party, Elton John’s thing, when I was in negotiating my . . . We just signed a big TV deal with CNBC. I understood how that world thinks because I did that. Like, I . . .
Andrew: How? How could you understand it from going to a party with them? Were you spent tens of thousands . . .
Nathan: Well, not the whole thing, Andrew. Not the whole . . .
Andrew: But how does it even give you a clue about what they’re about?
Nathan: Well, because you just pick up little things like you talk the celebrity at the thing when you’re mixing and mingling. You talk to investors who are there. I met the founders of Block.one there at the event. Like, there’s a reason Tesla sponsored Elton John’s Oscar event, right? It’s an industry that if you understand can wield a lot of power and that’s interesting to at least understand. The thing that I would say about my life is it’s very volatile. I will go hard one way or I will go . . . I’m wearing right now, this is maybe $30 total, right? I’m not wearing underwear. The other end is like, super luxurious go all in for a day and experience that life for a second.
Andrew: Okay. I think that makes sense. Let me take a moment and talk about my first sponsor and then we’ll get back into the podcast and what happened from there.
Andrew: My first sponsor is a company called ActiveCampaign. I find that a lot of people when they got started with email marketing, they go for this overly simplistic email company that one of the overly simplistic email companies that just looks nice and feels easy and frankly is easy, but it’s stupid, and it’s stupid because everybody is going to get the exact same email message from you. It doesn’t make it easy for you to start to bucket people based on interest.
Like for example, I’ll tell you this. Nathan, at Mixergy, we’ve got people who are diehard software entrepreneurs, but we also have some people who just want to create a little marketing agency around chatbots. They could all be in the same email list, but they’re tagged differently based on what they’ve done. Now, I’m doing a run around the world where I’m going to my goal for 2019 is to run on every continent, do a full marathon, and as I travel the world to interview entrepreneurs in places like Mexico City where I think I’m going to go first.
Not everyone gives a rat’s ass about my running and my trip, but a few people are and as soon as they click a link, they get tagged as being interested in that, so when I do find my next city, my next continent to go run a marathon on, the next week group of entrepreneurs to interview in a new place, I can email just those people. You need the right email marketing software to do that. Nathan, when I told you the ActiveCampaign was a sponsor, you told me . . . What was your . . .
Nathan: Yeah. I use ActiveCampaign as well. We were struggling early on with the podcast to figure out how to get people in, how to loop them in. We tried text message marketing, it didn’t work so well. It felt like I was invading privacy, sending texts every morning. ActiveCampaign made it easy. They honestly, they just had a cheap price point. And honestly, part of the reason is happening, Andrew, you know this, back . . . Gosh, it must been like four, five, six, seven years ago at this point, not to age us, but like, you were one of the first things I listened to in my dorm room before I even knew what entrepreneurship was. I was studying architecture, and so when I heard, “Hey, I use ActiveCampaign for email marketing. Go to activecampaign.com/mixergy.” I went there when I was launching my show and boom, before you know it my customer I think I pay them $20, $30 a month, so it works out nicely.
Andrew: That’s it, huh?
Andrew: Wow. They are super inexpensive, but what they do is help make that customization, that targeting work really well. If you want to get started with them, you could just go to activecampaign.com/mixergy what Nathan just talked about. Hit that Try For Free and you just get to experiment with it, see if you like it or not. And then if you decide to sign up, they’ll give you your second month free because they’ll know that you’re a Mixergy listener. They’ll give you two free one-on-one sessions with their strategist so you can really figure out how to use this in your business and get results with the strategist on the call. And finally, if you did start out with a different email marketing company and you don’t love them, they’ll migrate you for free. Activecampaign.com/mixergy. So you were then . . .
Nathan: Andrew, I have to confess something to you real quick because we’re going to the podcast. I always feel like I learned about podcast sponsorships through Pat Flynn, John Dumas and you because they put up their income reports. You didn’t, but I kind of got a sense of how you were doing it, and so I was always like, “Okay. I’m going to get my sponsor machine going for the podcast. I’ll mimic these guys. And then look, I’m a competitor.” I’m like, “I want to know how much they’re making and I will try and beat them. I want to get bigger deals, bigger contracts and drive the sponsors more value so they say, “We pay Nathan Latka’s show the most.” And it was funny. I haven’t landed ActiveCampaign yet but it’s a fun little competition I run internally with my team.
Andrew: Like, can you get the guys who are sponsoring my competition?
Nathan: Totally. Like, “Hey, HostGator has been paying for Andrew for years. Understand the ROI and see if you can land HostGator.” Now HostGator is one of our very large sponsors.
Andrew: So you kind of talked about that in your book. I think you have a whole chapter in “How to be a Capitalist without Capital” about copying competition. And you’ll do stuff like that, like, you’ll see who’s sponsoring Mixergy, “How are they landing the ad? Can I copy what’s working for him and maybe even improve it a little bit?”
The thing that I kept wondering as I read that chapter was, by copying the competition, you get, I find a crappier version of the competition’s product and you don’t get an understanding of your customers. Why not say, “I’m going to understand what my customers are going through, what their big pain points, and then find a better way to solve them than Andrew”? And if you started that way, you may not ever end up with ActiveCampaign but you might understand a lot of your people have a problem, I don’t know what, being influencers the way that you are and then you go and you create a whole new thing that I could never copy that I could never think of because I don’t have your audience. Why start with copying instead of starting with problems?
Nathan: Well, how much . . . Did you have a sponsor or a podcast sponsor guy that you like, pay to do your deals or did you work with an agency?
Andrew: When I started, I did it myself, and then Sachit Gupta started getting advertisers.
Nathan: Okay. I mean, I don’t want to talk . . . It’s a person. I don’t want to talk about what you actually paid him, but you paid some amount of money over some period of time to learn the podcast lessons by literally looking at where you are today and copying it. I’m basically getting a check for that amount of money for free, right? Like, why would I go spend that same money and learn those lessons myself? Now, what I will do is try and understand the best I can exactly what you or someone else is doing right now, get that same thing and then I will spin it, I will watch how my customers or my listeners react to it and then make adjustments from there.
Andrew: So you’re not saying, “Look, I’m going to just keep copying these other databases like CB Insights or whatever.” You’re saying, “I’m not going to be a guy who’s a fast copier. Instead, I got to start from something and instead of starting from zero and figuring out how to get to that first version, I’m going to copy them. Their current version will be my, let’s say, shitty prototype and then I could keep improving.” And I think even for GetLatka you talked about how you included your first users, you sent them a link. And I loved how the email that you sent out didn’t even include a domain name. It included the IP address. Am I right about that?
Andrew: Right? Like, “I don’t even have a domain name. Here’s what I have in mind. Can you go and take a look at it?” And I think I might have . . .
Nathan: I did have a domain name, but the IP address makes it feel like they’re the first ones.
Andrew: Got it.
Nathan: But no, you hit the nail on the head there, which is . . . Like, for example, when you re-launched Mixergy a while back, who put the specs together like the wireframes to pass to the design team?
Andrew: They wouldn’t let me do it because they were designers and I didn’t want to. I said, “Look, here’s what’s important to me. Make it easy for people to search for these things that they’ve said forever they had problems searching for”
Andrew: And you’re saying, “Look, Andrew, I wouldn’t have done it that way. I would have started by saying . . . ”
Nathan: I love Pat Flynn’s site. Go mimic Pat Flynn’s site. And once you get that MVP built, I’ll then make adjustments cater to the Mixergy audience.
Andrew: Right, right, right. Okay. All right. And you’ve got a lot of examples in your book about how you do that.
Nathan: Yeah. By the way, I’ll show like . . . Because I know they also sponsor your show, but like, this is page 216 here. I mean, you see where I basically say, “Listen, go to Toptal . . . I go to toptal.com, I hire developer.” You can go to toptal.com/mixergy to get like cheap prices that Andrew has negotiated for his audience. Seriously. But I go there and I say, “Listen, go to like . . . ” This one was Our. “Go to our.com, here’s the spec, like, copy them and then build that into GetLatka.” And we’ve made many edits. We look nothing like Our today, but it’s way more . . .
Andrew: Let’s get into this. Let’s go slowly into how you got to GetLatka. I’m fascinated by that. First step, you were trying a bunch of different things, you said, “I’m going to try podcast.” How soon before the podcast took off?
Nathan: Define took off.
Andrew: Made you feel like I’m not going to shed this. This is something I’m going to continue.
Nathan: So I before I even recorded the first interview said I’m going to do this for three years no matter what even if no one listens because I think podcasting is a long game and that [requires 00:28:18] really tricky discipline because I was spending money to do this, but I had money saved from Heyo. So I was not . . .
Andrew: But how much money were you spending on podcasting?
Nathan: Well, early on, I mean, I remember . . . And I’m going off memory now. I mean, I was probably paying $200 to $250 an episode of producing them on Daily Show.
Andrew: Oh, this is back before you got the prices down to its lowest [inaudible 00:28:39]. Got it.
Nathan: It’s 20 . . . I put the whole . . . My cost now it’s $29 an episode now.
Andrew: So you were spending that much and you said, “Okay, I’ve got to be in it for a long time.” But you were also at the . . . I remember talking to you at the time and you were coming up with all these ideas for how to increase listens, how to like, buy ads and make it work. So you said, “I’m committing to this.” Did you start by copying other people? Did you go in saying, “Here are the different sites that I’m going to learn from”?
Nathan: Yeah, really simple. I said, “I love Tim Ferriss. I never can sit down and listen to an interview. I don’t have a long podcast. I love John Dumas, 15 minutes, but I feel like he’s fluffy. It’s wishy-washy motivation stuff. I want hard numbers.” Right? A combination of those two things and then I had your angle which was like, it’s always the entrepreneur, the CEO. When you kind of combine those three things that I liked and I knew about my own listening habits, that’s how I made my show. It’s 15 minutes, very quick, it’s aggressive, there’s conflict, and it’s all about like, “What’s your AR? What’s your valuation? What’s your equity split?” And that’s it.
Andrew: Yeah. I’ve heard people talk about your podcast. That’s the thing that they love, that you just keep pushing people for the numbers and beating them up on why they don’t give you the numbers faster.
Nathan: You do this too, by the way, but you don’t . . . you will stop, I think, once you feel real uncomfortable, like, real uncomfortable.
Andrew: I don’t mind feeling uncomfortable. I just think that . . . So I’ve heard Kara Swisher, for example, ask CEOs, “So when are you going to go public? Come on. Tell me what . . . ” Now, there’s no way they could tell her. Unless they’re stupid, they’re not going to say, “I’m going public next month.” They’re not stupid. They’re not going to do it. Why is she asking that?
Well, she’ll ask things like, “So when are you going to get bought?” I guess when she was starting out in podcasting she was doing this. “When are you going to sell your company?” There’s no way they’re going to say, “I’d like to sell it in a year and a half.” They just don’t, so why push it for no reason? I could tell where I could push it and where I can’t and when I’m not going to get the number because they’re not idiots. I’m not going to keep pushing until I . . . I’m not going to keep pushing. Instead, I’ll back away then they see that I am not looking to trap them and they’ll see how safe this is, and then they’ll go into being more open on other things that they wouldn’t be otherwise.
Nathan: Yeah. I just think it’s not my job to make the guests safe or be their friend. I don’t mind if they hate me afterwards. And look, the Freshworks’ CEO just came on my podcast and I got him to share they will probably go public in the next year, and you might look at it and say, “That’s really stupid,” but for all you know, he’s in M&A talks with another buyer and by saying that in my show, it creates leverage for him. And by the way, that’s one of now our most downloaded shows that got a ton of traction. It was a scoop for me because I pushed him pretty freaking hard. So, I mean, I would say, the reason that you push on these things is because they’re really uncomfortable, they’re very tough, but if you get some piece of information there, it can be really, really valuable.
Andrew: Okay. And so we actually do-do a lot of that pushing beforehand and it would mean things like talking to people who work for them, talking to their competition, and talking and pushing them in private. And so I think that gives me a little bit more, but . . .
Nathan: Andrew, have you been sued from your show?
Andrew: I’ve been threatened a lot, but I like to think that that’s where the Dale Carnegie training comes in and helps me that I get threatened by people, “Don’t publish. Here’s why.” And then there have been times when I’ve been a little too aggressive in response. I don’t think that helps me. It sounds like . . . I know you’ve been sued before.
Nathan: No. I can almost guarantee you I’m the most sued podcaster and I love it.
Andrew: Because of what? Someone will reveal a number and then they’ll suddenly say, “I don’t want you to publish it.”
Nathan: No, not them. Their board. The CEO will come on, I will charm the hell out of them, they will reveal so much in 15 minutes. I release it. We email the CEO. It’s live. Market it. Put on Facebook, Twitter. The board hears it. Cease and desist three days later. I mean, I should start practice and putting them on the wall, a wall of cease and desist. By the way, I win every time because the CEOs have to sign a thing that says, “I own the rights to the audio.”
Andrew: Where do you make them sign that thing?
Nathan: It’s actually in the . . . I use Acuity Scheduling to book all the things. There’s like a disclaimer that says like, “Again, Nathan has rights. He owns the audio, blah, blah, blah. Check here.” And you can’t continue the booking unless they click Yes on that button.
Andrew: Yeah. You know what? I love Acuity for stuff like that. One of my other favorite chapters in the book was about systems, even though I’m all about systems and I don’t think that I need to learn anymore, I still love it because a system like that saves you a lot of frustrations. Like for me . . .
Nathan: I struggled with that chapter a ton because I didn’t know how to . . .
Nathan: It was very difficult to talk about. So I had to figure out like, a framework, so I use that book with the rainbow slinky on it, “Thinking In Systems,” I think it’s called. I don’t know if you’ve read that book.
Andrew: I never heard of it. I highlighted it in your book.
Nathan: Yeah. It’s like, basically says, you have inputs, you have outputs, you have stock where like, the stuff is storing them and then kind of outputs, right? And so the whole goal for an entrepreneur who wants more free time, the input start is sweat equity all your time. Over time you want the inputs to the other people’s time, other people’s money, and that’s kind of how you scale. And so I struggled articulating that.
Andrew: I thought you did a good job articulating it and I thought that your idea . . . I’m not going to do it, but I’m going to do a twist on it. The idea of saying, “When you create a system just go into Starbucks with $5 gift card, say to somebody, “Can I top you off by buying another cup of coffee? All I need you to do is just please go through this process and see if you can do it,” and in the process doc, you even have like the username and password so that they can log in and then you watch where they get stuck.
I don’t think I would do it in Starbucks, but I would 100% do it with my audience and say, “Look, guys, there’s a new thing that I need a system for. Anyone who wants to learn this who wants to do it, just hit me up, I’ll do a screen share via Zoom, I’ll watch you do this, I’ll catch your problems,” and then the one note that you had in there was asked him to speak out loud as they’re reading and doing things so that you can see what they’re thinking. Really helpful. I like that. It’s those little things that to me made the book really useful.
All right. So I see that you get your podcast going. I see that you’re working in systems. I was wondering at what point did you start making money with the podcast, serious considerable money?
Nathan: Oh man. When did I . . . My first sponsor was FreshBooks. Yeah, actually here this. Page 19. There’s that first sponsor check. So it was like . . . What is that? A $6,400 check from FreshBooks, and that is dated . . . I don’t see a date on it, but . . . Oh, 3-8-2016. There’s Jennifer. March 6th, 2016. We launched in August 2015 so that would have been three months in we made our first $6,000.
Andrew: Not bad. All right. And then you started reaching out to sponsors who were already sponsoring other podcasts.
Nathan: Yep, yep, yep. Yeah. So I mean, that’s what I did. I just went to your page and I looked at the bottom. I went to Pat Flynn, I went to Dum . . . I went to every show and just looked at the bottom. And what I would lead with though, is not sponsor my podcast, I would lead with what’s your CAC on Google AdWords and then say, “That’s really good. I can’t beat it,” or, “That’s really high. I can beat it.” And when I asked that question, they go, “Oh, this guy is thinking in terms of actual ROI, not just like a brand placement.” And that’s how I scaled a lot of these relationships from $5,000 a month. Now our most expensive sponsor is paying $20,000 a month and they pay all up front for the year.
Andrew: Oh, I did that too with FreshBooks, and that’s how I got them and that’s how I understood what they were looking for. I saw, though, I talked to your sponsors, and I think there was a period there where they weren’t getting the return that they were expecting. And maybe that’s why you then transitioned to saying, “I’m not just going to run you in my podcast. I’m also going to . . . ” Wow. I just did this blink as I brought that up.
Nathan: I was just saying I’m looking . . . Well, because I’m looking . . . I’m trying to find supporting documents from the question I’m anticipating you’re going to answer. By the way, my publishers hate the book. They were so frustrated with me when I wrote this because they didn’t want me to put screenshots in real stories. But I’m like, “Listen, people need to see [inaudible 00:36:09].”
Andrew: Why? You know what? So you said that and I think you even said your lawyer told you not to talk about this.
Andrew: That’s why I was a little skeptical. I said, “Come on. Why would the publisher not want evidence? Why would the lawyer not want [saying this stuff 00:36:18]”
Nathan: Because it was signed on NDAs.
Andrew: About what? With the sponsors?
Nathan: The iContact offer, then the evidence.
Andrew: And so you can’t just go to Ryan and say, “Hey, Ryan, can I talk about this?”
Nathan: Well, I mean, I could but he’s sold to Vocus and Vocus I think is now is sold to Cision and like, who actually owns what now? Where’s the end? I have no idea.
Andrew: Got it. And so you never went and got clearance?
Nathan: God no, because it takes too much time. I’m just going to put it in and if they sue me, great, it’s another press story, I sell more books.
Andrew: Got it. Got it. Got it. Okay. So that’s . . .
Nathan: The podcast sponsor like, I’m not as concerned about, but, I mean, I have a screenshot in the book, I can’t find it right now where . . . Oh, here it is. It’s page 45. It’s $180,000. That’s like $180,000 sponsor, I’ve done my best like blackout all the important pieces but like if they see that they’re like, “Nathan, we don’t want people knowing. We don’t want other sponsors that we sponsor to know we pay you like that much money because they’re going to ask for more.” I mean there’s all kinds of that . . . I mean, there’s all kind of push back here.
Andrew: I went through that. I actually wanted to get a sense of who it was. I figured I could kind of tell by the link that’s something and I said, “Why do I care that much?” Here’s the bottom line, though. It seems like you weren’t getting the return for them that they were looking for, but you said, “Look, I can find another revenue or another way to promote them,” and that’s when you went into one of your software products and said, “Look, the users of the software could be customers of my sponsor’s product. I’m going to link out to them.” And that’s where one of the messages of your book comes into play, which is don’t focus . . .
You said, “Look, if I had focused and just become a podcaster, I couldn’t have gotten enough money for them. But because I also got into software and the software had a user base that was similar to the podcast, I can find another way of bringing them value so that I could keep the money that I was charging them for the advertising.” I thought that was a very good case. That made a lot of sense. Okay. So then the business was growing. Last year 2018, how much revenue did you bring in from podcasting?
Nathan: Podcasting would have been about $400,000 or something like that.
Andrew: $400,000, not bad. And then your expenses are super small because . . .
Nathan: Twenty-nine bucks an episode.
Andrew: How much?
Nathan: Twenty-nine bucks an episode.
Andrew: Twenty-nine bucks an episode. So here’s the thing that stood out for me. I’m spending two freaking hours reading your book. Before that, I would have spent time researching you. The fact that you and I were friends I had a sense of who you were. There’s some backgrounds, I didn’t need to do that. My team would’ve spend time researching you. I wonder, like, how do you do a quality program when your calendar looks as packed as it does look on a few pages within this book. And I’ve seen your calendar. You and I needed to schedule something and you just said, “Look, let me do a screen share and we went through it.” And it’s like that. It’s exactly like what you put in the book. How can you do back to back interviews and zip through your time and still do a quality podcast with them?
Nathan: I don’t know that I can answer that, to be honest with you. And guys, what Andrew is referencing is, I will Tuesdays and Thursdays record basically 30 interviews back to back from about 7:00 a.m. to 7:00 p.m. and I just get energy from it. Every new CEO that comes on it’s like a new board game to play. You have to read their personality, make them comfortable in the first 30 seconds, get a joke in, maybe talk about a family member or something, and then start hitting hard with like, very personal information. And so I enjoy fun with that. I do no . . . Unlike you and unlike Tim Ferriss and a lot of very successful podcasters, I do no research because I didn’t want to take things for granted that my audience might naturally be wondering, so I thought if I stayed naive until I start hit Record, my brain would be more like the audiences.
Andrew: I don’t believe in that approach, but it’s working for you so I’m not putting it down. So that’s what it is. You just sit there and you go back to back to back and you do your interviews, you publish them, $400,000, and then at some point, you said, “Look, I’m getting all these guys to give me numbers.” And I think the first version of what became GetLatka, which is a site where people can see data, financial data directly from SaaS entrepreneurs’ mouths, was I thought it was a spreadsheet. I don’t have it, I can’t find it, but I remember you sending me a spreadsheet saying, “Andrew, what do you think? Do you love it?”
Andrew: Was it?
Nathan: Yeah, it was. It was literally . . . I hired a VA and said, “Listen to all these interviews.” And I asked . . . There are patterns on each interviews. Like, I ask what their customer acquisition cost is, how much revenue they’re doing, equity splits, payback periods, churn, which is how many customers they’re losing, things like that, how much they raised, their team size, revenue per employee, what their salary is. They create a column for these common questions, put in a big spreadsheet, I sent it out to a few people like you and said, “What do you think?” And then the response was so good from that, I then made a charged version where people would pay $500 to get . . . And a lot of people paid. I mean, by a lot, by the way, I mean, like, 15, 20 people paid really quickly. And I’m like, “Wow, I should productize this.” So the MVP was basically an Excel sheet.
Andrew: And you were trying to see, “Can I get somebody to actually pay for it?” And once you did, you said, “I’m going to invest.” How much money did you invest in creating the software?
Nathan: Oh, gosh, I probably . . .
Andrew: The first version.
Nathan: I probably put $50,000 in, but I pre-sold like the Excel sheet to the point where it was very little of my own capital. By the way, Andrew is such a great interviewer because he’ll ask you these questions which he knows I already said in the book and wants to make sure the numbers match. It’s a very good interviewing tactic.
Andrew: No, I don’t.
Nathan: I do not . . .
Andrew: I don’t.
Nathan: Oh, okay.
Andrew: I wanted it to come out of . . .
Nathan: You should try it.
Andrew: I wanted it to come out of your mouth. I also was a little disappointed that I should have known that it was $320,000 that you paid for the first house. It was still fresh in my mind, but I went with roughly 400. I said, “Wait, your job is not to say the number. Why would you . . . You should just say you spend how much and let the guests say . . . ”
Nathan: Okay. Fair enough.
Andrew: Anyway, if you want to go into my thinking, that’s what it is.
Nathan: No, no. I like that. By the way, I think your audience is like that too because you have a pattern recognition at this point. You’ve been doing this for so long. I mean, it’s valuable to understand.
Andrew: And I also find that the guests like it too, that I interviewed a founder just yesterday, I recorded it, I don’t when it’ll go up, from KeyMe. And during the interview, I researched what he was giving me. If he said people liked it, then I wanted to go look it up. If he said that, “When you search for locksmith in your city, you’re going to come up with me,” I wanted to see it and then I came up with this competitor, and then I brought up his competitor. And I could see that at times he wasn’t super comfortable, but when the interview was done, he liked it.
I think that people who have substance love to have like somebody push them, give them a little bit more of a challenging conversation, which is why you’re back here even though . . . And when you said, “Andrew, should we do another interview?” you didn’t say, “Andrew can we do another interview? Maybe you could go a little lighter on me.” You said, “Andrew, do you want to punch me again?” Like, it was something like that because you don’t give a rat’s ass. You’re not made out of air and you’re not a balloon that’s going to pop immediately.
Nathan: Yeah. And the text was, “Hey, Andrew, you want to do “Is Nathan Latka a Bullshit Artist?” round two?”
Andrew: Is that what it was? Yeah.
Nathan: Yeah. That was the title of Andrew’s first interview with me.
Andrew: Second sponsor is a company called JustReachOut. Check this out. I wonder if you’re going to use it or if you just do this naturally and you don’t need it. Founder of JustReachOut realized that there are a lot of entrepreneurs with great products who just can’t get publicity for themselves. And yes, they could hire a PR company for $10,000, $20,000 a month, but they don’t have the budget and they frankly can’t justify spending that much when they can’t directly see return on investment for every press hit and maybe it takes a little bit of time.
So he said, “I think what I could do is, I could kind of get them halfway there and then make it so that they could cross the finish line on their own.” And so that’s what he did. There’s a program, JustReachOut, where it’s basically a do-it-yourself PR program that he guides you through. And one of my past guests had a piece of software that did robocall blocking. You get those calls, Nathan?
Nathan: Which one?
Andrew: You must.
Nathan: Yeah. I just think I don’t answer my phone really anymore.
Andrew: Yeah, RoboKiller. And so we all are getting a bunch of these calls. Now, RoboKiller is kind of a boring . . . not a boring name, but it’s a piece of technology that’s hard to understand. Once you stick robo into software, people feel like, “It’s not for me. I’m not into robots. It just feels a little too confusing.” They get a ton of publicity. Before I interviewed them, I look them up. Like, local newspapers are covering them, local televisions are covering them, people . . . nationwide media is covering them the fact that they will block these robocalls. And he explained it really well with a cool hook the fact that these two guys created the software, they want a competition, now they’re saving everyone tons of time.
Anyway, I asked him, “Where did you come up with this idea? How did you get this all cued up?” And he told me, it’s my sponsor, and I was holding back, I said, “Oh, I think we’re going to do a sponsorship for them soon.” So the company is called JustReachOut. If you’re looking to get PR for your business, they will set you up in a way that makes it easy for you and actually even more effective than getting a PR company because when you the founder or someone on your team sends an email out to a media outlet, they take you so much more seriously than just some Joe Schmoe PR guy contacts them.
So they cue it up, make it easy for you to get that PR. And all you have to do is go to justreachout.io/mixergy, justreachout.io/mixergy. And as I understand it here, they’re offering a free demo to anyone who wants to sign up, so go to justreachout.io/mixergy, hit that Book Demo button. Let me see if they’re using the same software you and I are. Oh, no. I see what they’re doing. They’re doing a typeform. They want to make sure that you really are interested before they waste time. And this is probably the founder, Dmitry. This guy is so hands on who’s going to be doing these calls, demoing the product to our listeners.
Nathan: Andrew, do they do anything that . . . So, like, if people hear what you just told them, they might think like, Yesware. But it’s just only if you’re pitching PR people, not for salespeople. Do they do anything to quantify the PR hit if it lands?
Andrew:That’s a good question. Let me see. I think they do but I’m not 100%, so I’m not going to say that they do.
Nathan: Okay. It’s a hot space, though. You saw this morning TrendKite in this space just sold to Cision, which is what Ryan Allis eventually rolled up into. They sold it for $225 million.
Andrew: What’s TrendKite?
Nathan: TrendKite. Erik Huddleston is the founder of a company, came on my show. They’re doing 20, 30 million bucks in AI revenue. They raised 47 million . . .
Andrew: Do what? Let me see.
Nathan: It’s basically AI. It’s essentially a PR and AI and kind of outreach. It looks like here what Dmitry is doing, though, is significantly more specific that what TrendKite . . .
Andrew: Oh, this is PR software from TrendKite. Let me see. Introducing TrendKite, PR software for the digital world. Yeah, this is to, like, manage your data from it. They’re not doing the pitching for you as far as I understand, right?
Nathan: Of course. And it’s very expensive. It’s an enterprise play. It looks like Dmitry here. This is significantly more for kind of your audience. My audience, kind of founders, entrepreneurs that want to get in for less.
Andrew: Well, I’ll tell you what, guys, go check out trendkite.com. They’re not our sponsor. You’re welcome to check them out and compare them to justreachout.io. JustReachOut will do much more the strategy, the planning and help you send out those messages to influencers and journalists so that you can get your PR. And it seems like what TrendKite does is, they do more of the analysis on it and . . .
Nathan: For Fortune 5 . . . It’s not your audience, Andrew. It’s more like Fortune 500 brands.
Andrew: Wow, it is a hot space. I wonder what Dmitry is going to end up doing with that business. All right.
Nathan: I hope you . . . If you’re smart in signing up sponsors, you take a 1% cut in every sponsor that you have on your show.
Andrew: Are you doing that?
Nathan: We have taken equity in some, yeah.
Andrew: You have, huh? I’m kind of curious about this whole idea of doing equity in exchange for promoting.
Nathan: But you know why? It’s because I’ve learned this and this can go into . . . We have a magazine we launched based off the podcast. I believe that owning distribution channels are more important than owning the products themselves.
Andrew: I don’t know what I did with your magazine. I want to just post a picture of it and go, “What the fuck is Nathan doing with the magazine? Dude, why are you sending me paper magazines? We’re in a digital world.”
Nathan: Exactly. That’s why.
Andrew: Why? Because you want to stand out a little bit?
Nathan: It’s the opposite. Because you have reactions like that. And this reaction is going to drive a bunch more sales in the magazine. It’s not a free magazine either, by the way. It’s like probably the most expensive . . .
Andrew: Seven bucks. Every month I go into my books and I see we’ve got se . . . Like, what the hell are we spending $7 on?
Nathan: I mean, have you ever spent $7 on a magazine before every month? I mean, that’s probably the most expensive magazine in history.
Andrew: You want to know something? I also don’t even remember when I bought it. How did I sign up for this? It might have just been an email from you saying, “Andrew, I’m trying something,” and I don’t even remember giving you my credit card. What kind of magic are you pulling?
Nathan: Well, we use Stripe and ClickFunnels, so you probably went through that kind of funnel. Basically, the way I got this idea, by the way, I was listening to Nathan Chan, a founder, on your podcast many times, but I think he had a massive opening in that he only really had a digital component at the time. And then his monetization strategy now is much more like online courses which I have no patience for. It takes a lot of time to create new content every month. So I said, “We’re going to launch magazine.”
Andrew: Wait. But the idea behind launching a magazine is, I’m going to get you something in your hands that makes you say, “What the hell?” Is that it?
Nathan: A little bit. It’s also, though, kind of like when you go and . . . Okay. My magazine is your tequila, right? When people come visit you and they see like, a bottle of tequila on your desk, it’s like a talking point, and then you have like your . . . I don’t know if you do scotch or tequila, but you’re like famous . . .
Andrew: Scotch. I love it. We’ve known each other for years.
Nathan: Sorry, scotch.
Andrew: I even brought scotch to your place to do a scotch night in your thing, but you’re such a non-drinker that you will always call it tequila because it doesn’t really matter.
Nathan: Are they different?
Andrew: But you’re saying . . . Yeah, exactly. But what you’re saying is, look, that scotch it’s a tangible experience that you can’t get when you’re just signing up to somebody something online, and that’s what you’re creating, a tangible experience, but you’re charging for it.
Nathan: And it is an excuse for people to talk about me and my data when I’m not around.
Andrew: Okay. And it costs you how much . . . You’ve talked about this. You sent out an email at me, “Here’s how much I’m paying to put this together. Do people want . . . ” It’s not that expensive to put that magazine together.
Nathan: So, you pay a designer, you pay your writers, you do the data. Basically, a lot of the magazine, though, is essentially edited transcriptions from the podcast where I have them on, and then we have these massive charts where we put off like all the AR captured, our evaluation data from the company. So it’s basically like a physical Excel sheet. But no, it costs me for a U.S. person like you for example, you probably cost me all in fully delivered something like $3.50 a month, something like that.
Andrew: And then overall to print that, how much is it?
Nathan: Well, to print 1,000 of these, you’re going to pay . . . Gosh.
Andrew: Roughly, we’re talking with just a few thousand dollars under five.
Nathan: Yeah. Oh, yeah, yeah.
Andrew: Yeah, yeah. We’re talking . . . That’s the thing that was surprising to me because it’s such a unique thing, I didn’t have a sense of what it would cost.
Nathan: And by the way, it’s an also a place to expand ARPU with my podcast sponsors. I say, “We have a magazine now. It’s the only magazine for B2B SaaS CEOs. Do you want placement? It’s not cheap.”
Andrew: And you’re going to sell that to them in addition to . . . Got it.
Nathan: I already have the relationship which you know is the hardest part.
Andrew: And so coming back and saying, “I’ve got this new thing. Would you spend a little bit extra?” I think it was you talking in your book about land and expand that you want to go in there and then you just want to expand your attention span with me and others. But this is . . . That’s not going to be a big moneymaker, that magazine, is it?
Nathan: It’s huge. It can be huge because these are people paying four, five, seven grand a month for a magazine placement on top of five, six, seven grand a month for podcasts, then you launch the Facebook show which people are playing branded content for seven, eight grand a month . . .
Andrew: The thing that gets me is, I never read a paper magazine and maybe it’s just weirdly me that you send me a book . . . And I just got a book as a gift from a friend. I don’t know where the hell it is. I’m going to buy his digital version anyway. Maybe that’s it, that I don’t relate because I don’t read paper anymore, I read digital. And so for people who read paper, someone finally understood them and sent them something that stands out in their lives.
Nathan: A little bit.
Andrew: Is that it?
Nathan: Yeah, a little bit. But also like a lot of the people buying this, it’s private equity firms from VC firms, and then it sits on their desk. So when Andreessen Horowitz, you’re walking into their Menlo Park thing and you see Latka Magazine on our conference table at the beginning as an entrepreneur going, “What is this Latka thing? I mean, I can’t pay for that. It’s like the ultimate Trojan Horse strategy.”
Andrew: Okay. And I love that you call it Latka too. Like, you love yourself.
Andrew: You do.
Nathan: Nobody loves Nathan Latka like Nathan Latka love me.
Andrew: Yeah. The site is Latka, it’s GetLatka magazine. Okay, so wait. So you have this spreadsheet, you say, “[Howler 00:51:49] is already doing the database. CB Insights is doing this, Mattermark is doing this. Here’s what I want. I want basically to hire someone from Toptal to knock it off like, with my direction, they go and create a first version.” Cost you how much to create a first version of this database?
Nathan: Like a couple of two, three grand.
Andrew: Yeah. It wasn’t great at first. I remember going in and it was a little bit buggy . . .
Andrew: . . . but it’s like, “What the fuck? This guy is now taking his content from his podcast and making something really useful out of it.” The example you gave in your book was, “If you’re making purses, and you take the extra leather from the purses and you make key chains out of it, you’re basically making key chains.” Right?
Nathan: Sawdust out of sawmill.
Andrew: Sawdust out of a sawmill. Great. So you had that and then you started adding to it, and I asked you, “Where are you going with this thing?” then you said, “VCs are going to pay.” In my experience with VCs is they’re the cheapest guys on the planet except when it comes to their own care and feeding. They’re not paying for data. They just get some, I don’t know, some intern to go and pull this data for them. I don’t think . . .
Nathan: I think you’re wrong. VCs will pay a lot of money not for themselves but to hurt their competitors, so hurt other VC firms that they don’t want deal flow to go to. So one of the ways I sell my database is there’s a base fee of . . . it started off two, three grand a month, now it’s $10,000 a month, and you pay extra per month based on how many competitors you want me to block from signing up to the full database.
Andrew: Oh, is that . . .
Nathan: So Andreessen might sign up and say, “I’m going to pay an extra $3,000 a month to never take Kleiner, another $3,000 a month to never take these other ones,” and you’re basically, you’re charging based off them. It’s more defensive than it is active.
Andrew: Okay. All right. And so how much money you’re making with Latka, the website.
Nathan: About $60,000, $70,000 a month at this point.
Andrew: A month?
Andrew: From how many customers.
Nathan: I have like 6 to 7, 8, 10.
Andrew: So people are paying over 10,000 to get access to this and to block other people from getting there.
Nathan: Yeah. These aren’t basic people, though. I mean, I hate to say that, but these are people that are like a venture debt firms where if they get my deal, if they get CEOs coming to my show because the database only shows publicly if you go to getlatka.com right now, your audience will see about 5% of the database for free. To get the other 95%, because remember I’m doing almost a hundred and . . .
Andrew: Oh, you know what? And that just happened to me. I just scrolled past the first . . . I didn’t see this before. I scrolled past the first five or so and it immediately took me to a page that said, you want to see everything, pay.
Nathan: Including pricing.
Andrew: Got it.
Nathan: And you’ll see the CEO plan is like $2,000 for the year, but the investor plan it’s an email to me. I then use Acuity to get on a call and I sell them into $10,000, $20,000 a month kind of plan.
Andrew: I actually don’t even see the pricing on this website. I feel like also what you’re doing is a little bit you’re kind of copying Indie Hackers in the sense that Indie Hackers pull some of this data together and they also do like a Reddit style question process.
Nathan: They have maybe . . . Cortland and Channing have built, in my opinion, maybe the most beautiful sites for like, these kinds of small startups get going. I met with them many times. In fact, you can see . . . you can actually probably pick up some of their design on our side. I mean, we have totally ripped off things that we really like about what they’re doing. And I talked to Channing. They can’t really monetize because they’re incentivized by Stripe to just get free traffic. I mean, I asked him, I said, “Does it bug you can’t build a real business on this because you have this big powerhouse behind you?” And he’s like, “Whatever.” But no, I mean, that’s exactly what we’re doing. We’re making people pay for extra data.
Andrew: Okay. All right. And it’s the extra data. And so when you’re selling, give me like a couple of techniques that have worked for you when somebody scheduled a call with you and it’s on you to close a sale.
Nathan: Yeah. Hey, Andrew, you are at JMI Equity. You’re an associate. Every Monday morning you have to bring four deals to the partners meeting. You’re currently spending your time trying to set up calls and cold emails. Listen, I’m already getting the founders on my show. I interview 80 of them every single week. I only publish one a day. So I’ve done almost 3,000 interviews, only like 1,000 are published. And by the way, you don’t have time to listen to every one of them. Why don’t you just download my database with every ARR capture and revenue tagged back to the CEO’s voice saying it? That way, you look better at your partner’s meeting.
Nathan: That’s right.
Andrew: And then you’re closing them on the sale.
Andrew: But what about the fact that by the time they’re with you they’re kind of known already? We know . . .
Nathan: They’re not.
Andrew: They’re not.
Nathan: No, no. That’s the thing. There’s a lot of episodes I had . . . See the podcast now isn’t about the podcast. It’s an excuse to talk to every private B2B SaaS founder. My response rate on a cold email is like, way higher than an associate at a VC firm or an investment banking firm or private equity firm.
Andrew: Because you’re giving them publicity.
Nathan: Exactly. My pitch is, “Come on, get exposure.” Their pitch is, “Hey, you want money? Can we invest? Get on a call with our associate,” which everyone ignores. So I mean, it’s working very effectively. There’s a lot of data, thousands of interviews that you . . .
Andrew: What about the fact that it’s a little bit out of date then? So I’m looking at FunnelEnvy. Why did you do . . .
Nathan: They get a real time. They get a real time. So people who pay on their . . .
Andrew: Oh, they get their data real time.
Andrew: So they’re not paying necessarily for the old database or the old stuff. They’re getting . . . They want the latest stuff that you’re . . .
Nathan: Seventy new companies every single week. I’m basically like four analysts in one. If you pay an analyst $7,000 a month plus a deal commission you can do the math.
Andrew: And you’re not updating . . . Not updating. You’re not publishing that many. You’re publishing one a day but you’re recording tons.
Andrew: So a bunch don’t even get published?
Nathan: A bunch don’t even go live on the podcast or on the website. Only to paying customers.
Andrew: Got it. Got it. So there’s some people that you’re talking to just so you could fulfill the data for the private members.
Nathan: Well, yeah. And they get . . . Sometimes the CEOs get mad because my Acuity Scheduling follow-up after the interview is done is, “Hey, your go-live date is February 3rd, 2020.” And they’re like, “What the fuck?” And I’m like, “Well, listen, if you want to get released earlier, you can introduce me to three other B2B SaaS CEOs. So that’s how I’m able to get like, every SaaS CEO on and looking like a champ without having to like, beg them because they’re friends [inaudible 00:57:45]
Andrew: I see. I was wondering where you were getting good guests. I thought you had some kind of system for doing that. I like your follow-up email also that says, “Not promoted.” But who on your team promotes things for you? So now you’ve got them referring. It actually does . . . You’ve got a screenshot in the book. I do like the screenshots in the book. You’ve got . . .
Nathan: You do like those?
Andrew: I love it, yes.
Nathan: You can see, it doesn’t chop it up too much?
Andrew: No, not at all. Not at all because I thought it was relevant. A lot of times when there are images in books, it’s just a distraction, but this is really useful especially since it’s in the book, I don’t like when books go old fashion and they put the image in the center . . .
Nathan: Like linked to a web?
Andrew: . . . or linked to the website. It’s definitely, it’s really well done.
Nathan: You know the problem, though, I mean, you had . . . Did you have Greg Essentialism on or the folks that did like the one thing?
Nathan: Okay. Well, a lot of . . . I mean, I’m sure that authors wants . . . The publishers want books that are timeless, meaning they could be bought today, they could be bought in 30 years and . . .
Andrew: Right. I was wondering about that. There are a lot of . . . The things that make it helpful are the things that are not going to make it timeless like you’re saying go into Slack groups and then here are the Slack groups that I like and by the time that this is published, it’s going to be still actionable and really useful, but three years from now it may not be. And yeah, publishers will be . . .
Nathan: They hate that. I love it. Like, your audience should know this. This book is not timeless. It’s urgent. Every time people like . . . Andrew, the reason is, every time people make real money in life, they get ahead of a trend. So by nature, first person who reads this book will get the most value, the second, a little less. So your audience right now depending on when you release this, the release dates, March 4th, March 5th. Go to Amazon right now and grab it because it’s not timeless. It won’t work in a year.
Andrew: And is it a pre-sell on it? I don’t want to . . . Like . . .
Nathan: Yeah, you can pre-sell. Yeah, yeah, yeah.
Andrew: People can go to Amazon right now and get it. I highly recommend this book. I do think it’s useful. I think it’s useful in the way that Gary Vaynerchuk frustrates me. Gary Vaynerchuk will say to you, “You should be publishing a bunch of content.” I go, “How? How in the freaking business.” He goes, “You figure it out. You work your . . . ” “Well, dude, how about just take a second? If there’s a service that you use, give me a second. If there’s a way that you explain it to it . . . Let’s say, okay, you don’t use services anymore because you got a team, just take like five seconds and tell me how you communicate to someone on your team to create content for you when you’re busy. Just don’t tell me to do it. Tell me how to do it.”
And you’re the opposite. You’re like, “Here’s a big picture. Now I’m going to go super detail and tell you how to do it even if I’m kind of fucking over some of my sponsors.” Like I saw that you were talking about one of your sponsors, but then you said, “Here are a few other people who I use. All right. For anyone who wants to go check it out, the book is called . . . Wait. It’s, “How to be a Capitalist without Capital.” Did I get that right?
Nathan: You got it, yep.
Andrew: I always find that if I could actually remember the title of the book, then it’s one that I especially like. Go grab it right now. And I want to tell you to also check out getlatka.com. I don’t really . . . To be honest with you, I don’t check it that much, but I think that we as a team need to start using that and other tools to find who are looking for. For some . . .
Nathan: It’s not a good fit for you, though, Andrew. I really don’t think it is.
Andrew: No, it absolutely is. I’ll tell you why it is. I think we are so lazy as a company right now be . . . We’re not lazy as a company. We’re lazy in one place. We get hit on by so many people to do interviews, so it’s so easy to find guests that we don’t do research outside of our current ecosystem which is why I’m going to go to Mexico and go to all these other continent and actually go and interview entrepreneurs because Mexican entrepreneurs are not freaking coming to me. I’m going to go to them. So there’s that. But I also think what we should be doing is going to databases like yours and finding those hidden gem entrepreneurs who have interesting stories who we wouldn’t find otherwise because they’re too busy working.
Nathan: And Andrew, the number one request I get for my listeners, and you skipped over so many important questions, and I say I will never go longer than 15 minutes. So that is a perfect opportunity for you to go in and say, “You said this, this and this, now tell me how you did it. How did you . . . ”
Andrew: Right, right. I do love the details of it. All right. And the book, go get it in every bookstore. Guys, let me know what you think of it. Really, this is one of the few that I . . . I knew I was going to like yours, actually. I was just still surprised by how much I liked it. The other one was Russell Brunson . . .
Nathan: Why did you fear? You could have . . . By the way, you know me. I’m like a sales guy. I’m always marketing. You could have actually hated it. It could have been hell for you. So I have to tell you, it mean a lot to me.
Andrew: No. And you would have loved it if I told you that I hated it. I think you would have loved the ball busting about it. I think it would have made for an interesting conversation. No, I liked it for the reasons that I just expressed. You’re really clear about what you did. I liked that it was kind of diverse in what you were doing. It went from everything from what you did to be an influencer with 10,000 Instagram followers.
Nathan: I know.
Andrew: I didn’t think that you could call yourself an influencer with 10,000 Instagram [inaudible 01:02:10].
Nathan: Rolls Royce and . . .
Andrew: . . . free stuff you’ve got.
Nathan: It’s crazy I’ve gotten so much free stuff, the Rolls Royce, the $4,500 Balmain jacket. It’s crazy.
Andrew: Yeah, yeah. And so I like that combined with real estate combined . . . And for some reason, the whole thing absolutely work and for me someone who always thinks that everything is like bullshit until I research it, I liked the you had all those screenshots. Go, guys, go check out the book, and frankly, let me know what you thought of it.
And secondly, I want to thank my two sponsors who made this interview happen. The first is email marketing done right, go to activecampaign.com/mixergy. And if you want to get publicity for yourself and really you should be talking to this guy, Dmitry helped us so much, this freaking guy is. He is one of those guys who’s a giver which makes me guilty. I don’t like working with givers because I get too guilty. I like paying for stuff. So when we were trying to figure out content, the guy spent hours with us. You actually, I think you even saw him. He came to San Francisco . . .
Nathan: I saw him.
Andrew: . . . you and I were there when you . . .
Nathan: Oh, that was him. That the Starbucks.
Andrew: Shaved head, seen him down Starbucks, I asked him a question, “Can you help me?” The fucking guy is spending all breakfast helping me out, and it’s nice, I should love him and appreciate him . . .
Nathan: Oh, my Gosh.
Andrew: . . . and my head go, “How can I . . . ”
Nathan: Andrew, I didn’t know that. This site has come like way far forward from that. That was like two years ago.
Andrew: Yeah, yeah. He’s killer.
Andrew: It’s justreachout.io/mixergy. Go check him out. And Nathan, we’re going to have you back on. Bye, everyone.